Market Extra: What stock-market investors need to know about the ‘January Indicator Trifecta’

by | Jan 5, 2023 | Stock Market

The U.S. stock market got off to a bumpy start in 2023. A bearish backdrop means investors looking to a popular January indicators to clues to how the year will pan out should approach the data with caution, analysts said. The Santa Claus rally, the First Five Days Early Warning System, and the January Barometer are three seasonal indicators recorded by Yale Hirsch in his Stock Trader’s Almanac in 1972, which constitute what is known as the January Indicator Trifecta.

See: Here are five stock-market ‘early indicators’ that could decide the fate of your portfolio in 2023Santa’s late gift  At the end of the second trading day of a new year, stock-market investors usually tally up what’s known as the “Santa Claus rally”, which refers to the stock market’s tendency rise in the last five trading sessions of the year, plus the first two sessions of the new year. A failure to rally during the period is seen as a sign that further selling is likely in store. This year, though Kriss Kringle did make a stop at Wall Street, he did not reward investors with anything big to start the year. The S&P 500
SPX,
-0.99%
gained merely 0.8% during the most recent Santa rally period that concluded Wednesday, versus a long-term average of 1.3%. The Dow Jones Industrial Average
DJIA,
-1.08%
advanced 0.7% but the Nasdaq Composite
COMP,
-1.00%
dropped 0.2%, according to Dow Jones Market Data. “It was a chopp …

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